- Bitcoin (BTC) price volatility has reached historic lows over the last week.
- This could be a sign that BTC is headed for a more volatile phase in the near future.
- Bitcoin’s dominance has been declining, as altcoins have become more popular.
- Long-term holders of Bitcoin have remained unshaken, despite the recent volatility.
- Bitcoin’s price is currently consolidating around the ascending trendline, which could lead to a breakout soon.
You may have noticed Bitcoin’s sluggishness in price action as of late. Throughout the year, the flagship cryptocurrency has been the object of frustration for investors and traders, with its tendency to sit at a spot and drag its feet for weeks on end.
Bitcoin, back in 2015 or 2018 was way more volatile. By now $BTC would have ruined many a trader’s portfolios with liquidation alerts while enriching others.
If you HAVE noticed this sluggish trend in Bitcoin as of late, then you aren’t alone.
It turns out that Bitcoin HAS indeed been sluggish. And according to reports, this is one of the most sluggish Bitcoin has ever been, in terms of price action.
Let’s dive into the details of this recent trend, and figure out why BTC has been acting the way it has.
Bitcoin: Volatility At “Historic” Lows
According to buybitcoinworldwide, the 30-day estimated Bitcoin (BTC) volatility has dropped to 0.77%, its lowest level since the Bitcoin (BTC) network launch.
In terms of all-time lows, this takes the cake.
For perspective, the lowest it has been in the last five years was around 1.32% in July 2020.
Massive Volatility Incoming For BTC?
K33 was one of the first research firms to draw attention to this trend, as published in this tweet.
K33 says that BTC has been trading in a very narrow trend over the last six weeks. The cryptocurrency even ignored several macroeconomic events that would have sent its price sharply up or down.
BTC may be headed towards a very volatile phase in the near future, based on its behaviour in the past.
Vetle Lunde, a senior analyst at K33 mentioned in an article, that when crypto sleeps this deeply, they usually enter a very “violent wake-up” later on.
The market, Lunde says, is currently at a level of stability that has never been seen before. However, these “stability stages” usually serve as a “massive pressure valve” for volatility when the market “reignites”.
Traders Worry As BTC Dominance Declines
Bitcoin’s lack of volatility is one of the factors that contribute to the worry and frustration of Traders.
The situation is dire enough, that the cryptocurrency’s dominance may even be dropping.
In July, Bitcoin’s total market dominance dropped to about 49.5%.
This marked the cryptocurrency’s monthly low in dominance.
In truth, Bitcoin’s drop in dominance over July was due, in part, to Ripple’s partial victory against the SEC in court.
Altcoins are now relatively less vulnerable to regulation, explaining how they managed to wrestle some of Bitcoin’s dominance out of its hands.
Bitcoin’s Long-Term Holders Hold Steady Afterall
Long-term holders of Bitcoin have remained unshaken despite all the changes in the market over the past two years.
Nearly 55% of the Bitcoin supply has not changed in the past two years, according to Glassnode’s on-chain data.
Also, Santiment recently observed in a tweet that after a slow July, BTC address activity picked up in August and hit a 3.5-month high.
The firm expects a short-term price bounce for Bitcoin ($BTC), because of its increasing use cases, huge loss transactions and the generally negative sentiment.
BTC’s Price Analysis
The sellers presently have a little advantage in the fierce war taking place in the Bitcoin market between the bulls and the bears.
On August 1, Bitcoin’s volatility increased as the cryptocurrency entered a flash rally and hit $30,000 unexpectedly.
However, the bears soon stepped in and were able to push the price below the immediate support around $28,861.
The bears being so quick to step in and “pull a fast one” on the bulls, shows that the bears are still going strong, and are guarding the $30,000 zone with everything they’ve got.
The cryptocurrency is trading at $29,254 at the time of writing and is still under the $29,500 resistance.
The RSI sits under the neutral zone, indicating some degree of advantage for the bulls.
However, the longer-term ascending trendline is still in play for Bitcoin, indicating that is still going strong from a wider perspective.
Judging by Bitcoin’s current price action, a healthy correction may be necessary.
A good play would be for Bitcoin to decline for a while, and consolidate around the ascending trendline.
The cryptocurrency can ascend from here and have enough liquidity to push through to $30,000 and finally break through, once and for all.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.